Bridging the trust deficit

The new dispensation in Sri Lanka is seen as a strong votary of closer India-Sri Lanka ties, but there are many contentious issues on which the two countries have to walk the tightrope.

Sri Lankan Prime Minister Ranil Wickremesinghe arrived in New Delhi yesterday (September 14) on a three-day bilateral visit, his first international visit after taking over as Prime Minister last month. Mr. Wickremesinghe’s United National Party (UNP) together with its allies secured a near-majority in the parliamentary election last month. Sri Lankan President Maithripala Sirisena engineered a division in the ranks of the Sri Lanka Freedom Party (SLFP), thus effectively isolating former President Mahinda Rajapaksa.

Ram Madhav

The result was the formation of a national government under the prime ministership of Mr. Wickremesinghe, with both UNP and SLFP as partners. With the two main parties coming together to form the government, the opposition space has been left to the third largest group in Parliament, the Tamil National Alliance (TNA).

The new dispensation is considered to be a strong votary of closer India-Sri Lanka relations. The President, the Prime Minister as well as the Leader of Opposition are all seen as friends by India. The last few years have seen a trust deficit between the two countries. Many in India suspected the Sri Lankan leadership of encouraging forces inimical to its interests in its vicinity. Unfortunately, the Rajapaksa government did precious little to alleviate India’s misgivings.

Challenges for the government

The new government in Sri Lanka has many challenges to face: the country’s economy is sagging; the United Nations Human Rights Council is going to take up a resolution on war crimes in Sri Lanka for discussion later this month — a very sensitive issue for both the Tamil and Sinhala population in the country. The government has to walk a tightrope on the issue.

It is in these circumstances that Mr. Wickremesinghe is visiting India. A Comprehensive Economic Partnership Agreement (CEPA) will be one of the important issues that India would like to clinch during this visit. However, there is considerable concern about, if not vocal opposition to, the agreement in the Sri Lankan business circles. India needs to correct the perception that CEPA will only benefit the Indian side and the non-tariff barriers in India will be an obstacle to Sri Lankan businessmen.

The other perception problem that India needs to address is that it doesn’t walk the talk on big-ticket projects. The Sampur coal-fired power plant is one such project which has lingered for more than a decade. The delay in its implementation has led to several new problems. Its revival is mired in land and environment-related controversies. Within the 500-acre power plant area, there are around 30 Tamil families who have been living for many years. They have to be rehabilitated elsewhere with proper compensation. In addition, more than a thousand Tamil families, who have been additionally settled just on the periphery, may also raise objections to the project coming up. Some of them have lands inside the power plant area. Environmentalists are also opposed to the power plant. They might go to court. While India may argue that it has technologies that address pollution concerns, these issues have the potential to get entangled in legal problems.

Another issue which is more than a decade old, on which India has not made much progress, is that of oil tank farms on the east coast. These British vintage storage farms give India enormous scope for oil trade in the whole of South East Asia. India should quickly operationalise these oil tank farms. It must not forget that the previous government in Colombo had offered them to the Americans. It should start negotiations for setting up a refinery in Trinco area to treat crude oil.

India’s strategic and economic priority should be to develop the east coast of Sri Lanka, especially the Trincomalee-Batticaloa belt. The Trinco belt has an enormous potential for trade, tourism, industry and commerce. It has vast stretches of virgin beaches. The Trinco port can be developed into a major port. A new airport can be developed in the area and can be connected directly with Tamil Nadu for the benefit of the Tamils in the north and east of Sri Lanka. Most importantly, by entering Trinco coast, India will be making a big presence in the trade routes of the Indian Ocean.

There are a couple of contentious issues on which India and Sri Lanka might have to be cautious. The Tamils of the north and east must be complimented for their overwhelming support to the TNA in the parliamentary elections that has helped the party secure 16 seats. TNA leader R. Sampanthan has become the Leader of the Opposition. TNA fought the elections on the principle of greater constitutional rights to Tamils for just and honourable place in the Sri Lanka constitutional mechanism. The radical elements have been rejected by the Tamil voters there. The Sri Lankan government should gratefully acknowledge this huge contribution of the TNA and move forward with specific steps to address the Tamil issue. Granting more constitutional powers to the provinces is the first important step.

The UNHRC resolution on war crimes is another important issue on which both the countries have to reach an understanding. Sri Lanka can gain from the expertise available in countries like the U.S., India, and so on, to facilitate a credible investigation by its agencies. It is important for justice to be seen by the Tamils and the international community to be delivered.

Dispute over fishing

Another contentious issue that defies any immediate answers is that of fishermen. The historic waters between India and Sri Lanka have become a battleground between the Tamil fishermen on both sides, leading to frequent clashes, incarcerations, and even deaths. A negotiated solution needs to be found on this issue. Pending the dispute over fishing, the adverse ecological impact of bottom trawling must also be addressed.

Prime Minister Narendra Modi’s visit to Colombo early this year raised the hopes in that country of a stable and reliable friendship. Lakshman Kadirgamar, former Foreign Minister of Sri Lanka and a great friend of India, had once described India-Sri Lanka relations as “irreversible excellence”. Centuries-old cultural and religious ties make the relationship irreversible. But the challenge is to make it ‘excellent’. It is too important a relationship to be left to the officials alone. Sri Lanka requires political handling.

World Bank ranks Gujarat as most investor-friendly State

Gujarat has come out on top in the World Bank’s first ever ranking of States on the ease of doing business in India.

States were assessed on the implementation, over a six-month period from January to June, of a 98-point reforms agenda.

Chief Secretaries of States participating in the “Make in India” workshop inaugurated by Prime Minister Modi in New Delhi last December finalised this action plan on “Ease of Doing Business”.

It was decided later to evaluate States to assess progress by June 2015.

BJP-governed States dominate the top ranks. Gujarat implemented 71.14 per cent of the reforms, according to the assessment. Andhra Pradesh came second with a score of 70.12 per cent, Jharkhand third at 63.09 per cent, Chhattisgarh fourth with 62.45 per cent and Madhya Pradesh fifth with 62 per cent.

The largest recipients of foreign investments, Maharashtra and Tamil Nadu, are ranked eighth and twelfth with less than 50 per cent scores.

Annual exercise 

“The rankings reflect the ease of doing business in these States by the small and medium enterprises rather than foreign investors,” said World Bank Country Director Onno Ruhl.

The Union Department of Industrial Policy and Promotion, the Confederation of Indian Industry, Federation of Indian Chambers of Commerce and Industry (CII) and KPMG were involved in the exercise.

The rankings of States will be released annually.

“It is expected that investments will begin to flow to States that make it easier to do business, seeing which the low-rank States could be encouraged to take up reforms,” said former CII president Sunil Munjal at the release of the report.

The focus of the study is on eight key areas: The setting up of a business, allotment of land and obtaining construction permit, complying with environment procedures, complying with labour regulations, obtaining infrastructure-related utilities, registering and complying with tax procedures, carrying out inspections and enforcing contracts. States made good progress in terms of tax reforms, the report stated.

Punjab emerged the best performer in the category ‘setting up a business’ and Maharashtra in ‘obtaining infrastructure-related utilities’. Madhya Pradesh topped ‘allotment of land and obtaining construction permit’ and Karnataka ‘registering and complying with tax procedures’. Gujarat was assessed as the best for ‘complying with environment procedures’. Jharkhand is the best in two categories: ‘carrying out inspections’ as well as ‘enforcing contracts’.

“While the World Bank has been working for many years with officials of the Government of India, this gained traction only in the last one year thanks to the political commitment coupled with renewed efforts of officials of Central and State governments to make India an easy and simple place to do business,” said Mr. Ruhl.

State	State Score
Gujarat	71.14%
Andhra Pradesh	70.12%
Jharkhand	63.09%
Chhattisgarh	62.45%
Madhya Pradesh	62.00%
Rajasthan	61.04%
Odisha	52.12%
Maharashtra	49.43%
Karnataka	48.50%
Uttar Pradesh	47.37%
West Bengal	46.90%
Tamil Nadu	44.58%
Telangana	42.45%
Haryana	40.66%
Delhi	37.35%
Punjab	36.73%
Himachal Pradesh	23.95%
Kerala	22.87%
Goa	21.74%
Puducherry	17.72%
Bihar	16.41%
Assam	14.84%
Uttarakhand	13.36%
Chandigarh	10.04%
Andaman and Nicobar Islands	9.73%
Tripura	9.29%
Sikkim	7.23%
Mizoram	6.37%
Jammu and Kashmir	5.93%
Meghalaya	4.38%
Nagaland	3.41%
Arunachal Pradesh	1.23%

The comprehensive healthcare alternative

Rescuing Maternal and Child Health-only systems, which have become under-resourced and have built a very high-cost but low-performance culture, will be a challenging task.

Given the rising burden of non-communicable diseases, there is an increasing demand to build health systems that can address these concerns. However, given how large the unfinished agenda of the Millennium Development Goals is, the Indian government has chosen to stay focussed on Maternal and Child Health (MCH). But is the most effective way to deliver on the MCH goals to build an MCH-only health system, or does it need a completely different approach?

Medical and staffing issues

Medically, since the most important drivers of infant, child, and maternal mortality are haemorrhage, sepsis, abortion-related complications and hypertensive disorders, it is clear that it is no longer adequate for a health system to focus on preventive-promotive messages and limited facility-based treatment options. Instead, at the community level, there needs to be clinic-based obstetric and emergency care on offer, and, within a reasonable travel distance, hospital-based emergency care. If recent data relating to infant mortality rate (IMR) and maternal mortality rate (MMR) are examined, it appears that higher availability of more advanced medical care at proximate hospitals in, for example, Kerala and Tamil Nadu, is indeed associated with much better MMR and IMR outcomes. Equally wealthy States such as Himachal Pradesh, which do not have these advanced facilities at proximate locations, are not able to show similar rates of improvement despite spending more money per capita on healthcare.

Recognising this issue, the Indian government has recently mooted the concept of a health and wellness centre (HWC) that is intended to be more comprehensive rather than merely connoting “first contact care or symptomatic treatment for simple illness with some elements of care for pregnancy and immunisation included”. And, if indeed the HWCs (the erstwhile sub-centres) are able to address all of the necessary MCH conditions, then it becomes possible for the next level centre to provide a much broader range of care upon referral by the HWC. Clearly, building such a system to serve only MCH needs will not be cost-effective nor will it keep all of the necessary personnel gainfully employed. Having a much wider range of conditions would be the only sustainable way to address this concern.

Building such a broad-based system will need a substantial amount of investment for which political commitment has not been very forthcoming. Because of this, in addition to resource shortage, front line personnel such as nurses and doctors often offer low-quality services and display a high degree of absenteeism without fear of political reprimand. While there are a number of reasons for this, one of them is the fact that the Indian (MCH-focussed) health system is currently able to cope only with conditions that account for fewer than 25 per cent of the Years of Life Lost (YLL). Even in high-fertility States such as Bihar, in a typical year, fewer than 20 per cent of the households are likely to have maternity-related needs. Broader health systems which are able to address a much larger proportion of conditions have the potential to engage a much larger number of voters. Arguably, the politician under such a system is much more likely to both allocate more resources as well as monitor performance. The health system thus develops the capability of handling a wider range of issues, while simultaneously positively impacting the MCH agenda.

The difficulty that health systems in India unfortunately face is that since they were designed as MCH-only systems, they have become chronically under-resourced and have now built a very high- cost but low-performance culture and a concomitant reputation. Rescuing these systems may now become very challenging. Politicians have shown a strong reluctance to provide additional funds to the government-run health system “driven by the idea that it does not make sense to throw money at a system that hardly works, performs or is a big black hole.” They instead prefer to put additional investments into fragmented and “cheap” in-patient insurance and ambulance schemes that are operated by the private sector but are funded by the government. Such an approach is resulting in significant fragmentation of the health system, with a low-quality, skeletal MCH-focussed government-run primary care and secondary care system. There is also a separate, private sector-owned secondary and tertiary care system with very high variations in the levels of quality, which is accessed by low-income families through government-sponsored insurance programmes and by everybody else using out-of-pocket payments. This prevents the evolution of both an integrated government health system or a privately run managed care system. This is an example of a situation where building an MCH-only health system has actually hurt our ability to grow it into a well-functioning health system of any kind, including one that fully serves MCH needs.

For various good reasons, 68 countries, including low income and middle income countries, have chosen to use health-specific taxation such as mandatory payroll deduction. For countries such as India and China, which also have a large informal sector, since mandatory payroll deduction is not an available option for a large segment of the population, the direct sale of healthcare packages or insurance becomes additionally necessary. This is much more difficult to do, but not impossible. This is because while it is clear that health shocks have a very large impact on those below the poverty line, it is also clear that even those at the 90th percentile are not very far above the poverty line, and a health shock can indeed quickly send such a family down to the lowest one per cent in terms of income and wealth. However, unlike families below the poverty line, those above it do have the financial ability to pre-pay for healthcare services because it is not their average out-of-pocket expenditure that is their problem, but their inability to obtain proper care when needed and the high variability of actual expenditures. However, getting the non-poor populations to participate in financing through pre-payment (by, for example, requiring the purchase of a comprehensive family health cover along with auto-insurance for all vehicles, including two wheelers), an integrated delivery system is going to need a much broader health system and one that performs at a much higher level than it currently does. But, unfortunately, once again the decision to build a MCH-only health system, which performs at a poor level of delivered quality, has left consumers with low confidence in government-run health systems. To now persuade the non-poor to pay-in to a health system that is operated by the government is likely to be an uphill task.

Historic opportunity

For the States, the larger availability of untied funds from the Centre presents a historic opportunity to design health systems that far more closely reflect their own objective ground realities. While centrally sponsored health schemes have offered a number of benefits, they also came with the associated baggage of standardised design. Bihar, for example, continues to battle with high levels of IMR and MMR and a high level of poverty. Tamil Nadu and Kerala have brought those rates under control but, unlike Bihar, are seeing a climbing suicide mortality rate, particularly amongst their 15-25 year olds. Himachal Pradesh, which has a much smaller and significantly wealthier population and over five times higher per capita income, has very similar IMR and MMR numbers to Bihar, combined with a high accident mortality rate. Building comprehensive healthcare systems which reflect the realities of each State will not only yield strong benefits on problems such as IMR and MMR but will also, over time, help build health systems that respond to a much a wider set of concerns. Narrowly focussed health systems on the other hand risk falling short not only on their goals but also make it difficult, if not impossible, to build broader health systems for the future.

IISc, IIT-D in top 200 rankings MIT and Harvard hold the top two positions in the world university rankings

IISc, IIT-D in top 200 rankings
MIT and Harvard hold the top two positions in the world university rankings

India has made its debut in the Quacquarelli Symonds’ (QS) list of top 200 universities globally. The Indian Institute of Science, Bangalore and the Indian Institute of Technology Delhi (IIT-D) have been placed 147 and 179 respectively in the QS World University Rankings for 2015-16, which has the Massachusetts Institute of Technology (MIT) and Harvard at the top two positions.

While IIT-D has improved its position from the previous years’ rank of 235, IISC Bangalore is a new entry in the ranking list. None of the Indian universities has made it to the QS’ top 200 in the previous editions.
According to the QS list, there are 14 Indian institutions in the World University Rankings and half of them are among the global 400. “While the IITs and the Institute of Science have all progressed in this edition, the large comprehensive universities, such as the University of Delhi and the University of Mumbai have lost ground, principally because of the normalisation by faculty applied to the research indicator but also due to deterioration in other dimensions as well,” the QS says in its release.

In the list of top 300 are, IIT Bombay, which was placed at 222 last year has moved up to 202, IIT Madras up from 321 to 254 and IIT Kanpur at 271 from 300.

Jawaharlal Nehru University leads the Indian universities in Arts and Humanities table placed at 168th position while the University of Delhi is placed at 191 in this section and 191 in the Social Sciences and Management section.

Speaking to The Hindu, IIT-D Director K. Gupta said the improvement in the ranking was a result of the institute’s dedicated emphasis on improving the quality and quantum of research. “We are dedicated to excellence in teaching, research and innovation and we pay attention to the maintaining the best possible standards in these fields,” he said.

A step forward: IISc

“The rankings are largely due to our first undergraduate batch graduating this year. This was one of the criteria needed to feature in the global rankings,” said Anurag Kumar, Director, IISc, adding that the institute had ensured information was given in the correct format to facilitate proper reflection of the performance of the institute on the global stage. He believed the debut was a “step forward” for the institute. “Our performance has remained high. Other universities are catching up due to the impetus given to research in their regions. For us to be in the top 50, we need investment and support for our faculty,” he said.

Going beyond MAT on FIIs

As anticipated, the recently released Justice AP Shah Panel report strengthens the government’s resolve to put to rest the contentious issue of the imposition of minimum alternate tax (MAT) on foreign institutional investors (FII). Its prompt acceptance by the government undoubtedly communicates a firm message to the international community that it is willing to make changes to dispel the concerns on retrospective taxation.

The vexed issue of levy of MAT on FIIs arose due to an ambitious interpretation by the administration. While the primary issue with such levy and its validity has been a subject matter of a writ before the Mumbai High Court, the administration justified it by drawing from the order of the Authority for Advance Rulings (AAR) in the case of Castleton. Revenue had appealed at the Supreme Court against other orders of AAR which favoured the foreign companies’ stand in the matter. With the MAT-levy, most FIIs and FII associations skipped the administrative appeals option and instead sought constitutional remedy by filing writs at the high court level, and ultimately, at the apex court level.

An interpretational aspect on levy assumed significance after the introduction of Section 9A to the Income Tax Act (vide Finance Act, 2015), which clarified that having an investment fund manager will not render an FII to be deemed as having a place of business in India, the condition that triggers applicability of MAT. The said amendment was a progressive approach that encourages the presence of a fund manager in India to bolster FII investments without the latter having to worry about onerous tax obligations such as MAT—a demand the FII fraternity has raised with successive regimes at the Centre.

The interpretation by the taxman that the amendment is effective only April 1, 2015, onwards was erroneous on various counts. First, FII taxation has been in the statute since 1993, and the levy of MAT has never been a matter of debate. A simplified FII taxation, by way of fixed capital gains tax levy, was put in place by the law-makers to provide not just certainty to encourage flow of foreign funds, but enable fund managers to compute the precise return on investments for investors in such funds. The tax administration’s argument for MAT on foreign companies in general (those that aren’t FIIs) was dismissed by the AAR (in the Timken and Praxair cases) and Revenue did not by pursue appealing to higher courts, thereby indicating its finality.

An interpretation of Section 9A ought to be read as clarificatory in nature and nothing more. Courts have successively held that even if a clarification is prospective, it is supposed to be declaratory and has retrospective applicability. The argument that FIIs being exempt from MAT does not apply retrospectively is meaningless if the 2015 amended law itself is to be read as clarificatory. An argument that a similar case with respect for levy of MAT on a foreign company—Castleton is not an FII—is before the SC also did not justify MAT levy on FIIs. The matter before the SC against the AAR order is applicable to facts of Castleton and not binding on other foreign companies and certainly not on FIIs, which are subject to an independent tax regime.

That said, the government in its wisdom felt appropriate to constitute a committee chaired by Law Commission chairman Justice AP Shah. The key issues which Shah Panel examined were whether the MAT provisions extended to foreign companies, whether the FIIs could be considered to have a place of business in India notwithstanding that they do not have physical presence, and whether MAT provisions override the provisions of double taxation avoidance agreements.

Having analysed the legislative history and intent behind MAT, the panel concluded that MAT cannot be levied on FIIs. In doing so, it observed that MAT levy was introduced to plug an abuse by book-profit-making companies declaring dividends but not paying corporate tax due to tax concessions. Such intent was evident from successive Budget speeches, circulars issued by the CBDT explaining its introduction and numerous amendments. The panel reasoned that the MAT provisions would not apply to companies which do not have a place of business in India.

Since FIIs do not have a place of business in India and carry out their decision-making activities overseas (a concession made in 2015 budget to encourage fund managers to be present in India), the panel concluded that there cannot be a case for MAT levy. The panel concluded that MAT provisions cannot override the benefits under the tax treaties. The committee has recommended amendments to the law and clarifications indicating the inapplicability of the MAT provisions to FIIs prior to April 1, 2015.  It recommendations have been accepted by the government, and as an immediate relief (pending amendment to law), the Central Board of Direct Taxes has issued instructions to its officers to keep the proceedings in abeyance.

Interestingly, the committee has stopped short of recommendations on applicability of MAT on other foreign companies. Besides, nothing precludes a foreign company which doesn’t have a place of business in India from taking a position based on the panel’s recommendations. It should, however, not deter the government from treating non-FII foreign companies on the same footing as FIIs, thereby burying the entire debate. The implications of MAT controversy are a good reason for the government to conduct a comprehensive review of taxation of capital markets transaction. The Shome panel in 2013 made some useful recommendations, including a simplified regime and consistent tax rates agnostic to status of investors1institutional or private, domestic or foreign. I trust these recommendations will find way in successive budgets, given the importance of institutional investors to the growth of Indian capital markets.

Mediocrity over meritocracy

The time-worn lament by IT czar N R Narayana Murthy recently that there has not been a single invention from India in the last 60 years that became a household name globally, nor any idea that led to "earth shaking" invention to "delight global citizens" merits attention. Some four years ago, chairman of the scientific advisory council to the prime minister C N R Rao warned us of the intellectual decline in India.

This, he said, despite its economic progress while pointing out that India's contribution compared to, say, China and South Korea that have overtaken India on various indices including education and science and technology - to the top one per cent of the intellectual and scientific output is negligible.

Last year, President Pranab Mukherjee shared similar sentiments calling for "transformative ideas" to steer India's educational institutions from the "muddy waters of mediocrity". He took note of the fact that while US and China file lakhs of patent applications annually, India has to be content with a few thousands. Somewhat prescriptively, he ruled the poor neglect of research in India's higher educational structure.

Judging by quotients of righteousness, nothing could be more spot-on than Mukherjee's concerns shared across the spectrum of academic hierarchy. He observed that scholars obtain international recognition by doing their research work in foreign universities and not in Indian universities - Nobel laureates like Amartya Sen, Har Gobind Khurana, Subrahmanyam Chandrasekhar and Venkatraman Ramakrishnan being a few shining instances.

His remarks were based on the lackadaisical and unimaginative academic atmosphere in Indian varsities and educational institutions, which, despite accommodating over 20 million students, fail to find a place among the top 200 world class universities graded by world class agencies. It has often been suggested that the solution does not lie in hiking up the number of central universities and IITs and IIMs but rather in shoring up the standards of existing institutions.

In this abyss of mediocrity, little incentive is put on excellence, borne out by the allocation of a minuscule 3 per cent of GDP to education. As per a World Bank dataset for 2005-09, India's R&D expenditure was 0.81 per cent of the GDP, while the same was much more for other countries. It also showed that India had only 160 researchers per million population compared to a parallel figure of 5256 in Sweden, 6307 in Singapore, 5151 in Japan and 3838 in the United States.

The 2014 Global Innovation Index saw India go down 10 places (ranked 76) as compared to 2013 while other BRICS nations managed to improve their positions on the index. We all know how hobbled we are by a lack of critical infrastructure that failed to tap the energies of a thriving human resource. It is about time we internalised that the funding of fundamental research is an investment rather than a cost and it is for the economic rationalists to understand that basic discoveries in one field may represent "applications" of existing knowledge in another field which, in turn, might usher in both a financial return and an even greater social benefit. The Economic Survey for 2014-15, released earlier this year noted that the lower penetration into higher levels of education was leading to higher dropouts, especially among the secondary and upper primary students.

This resulted in accumulation of less educated and less skilled job seekers "at the bottom of the pyramid." It ascribed low employability levels as much to the poor quality of education as to the fact that fewer students opt for higher education. Incidentally, over 60 per cent of the students in Harvard or Stanford or MIT enrol for the PG and PhD programmes. For a country of a massive population size, elitism is often discounted in fear that anything having to deal with a minority is bound be undemocratic, ample testimony of which can be found in the instinct of government control over a few academic centres of excellence that we have.

Subjects of 'value'

The objective of education in India being reduced to employment and with dwindling atmospherics for fundamental research, we now see proliferation of only those streams/subjects that are of 'value' to the amorphous thing called market. It is not uncommon to see excellent scorers who are very good at 'cracking' an examination possessing little theoretical understanding of the subjects of his study.

If faculty and student recruitment are to be bound by the same principles of social justice that are mandated in the public education system, there is little room for meritocracy. Why we cannot produce class and a culture of excellence bears serious reflection.

A distinguished professor of English from Jadhavpur University once took serious exception to the brave talk about world-class universities arguing that the ills of education in India begin at the primary level, with poor school enrolment and high drop-out rates compounded by failures in health and nutrition. The fundamental problem of the Universities for Research and Innovation Bill, 2012 with the main objective to prop a few "innovation universities" as hubs of education, research and innovation was that it wanted to implant them as islands of excellence.

In this new-found zeal for control and ideological indoctrination, as purported by the Indian Institutes of Management Bill, 2015 by the dictates of which a government nod is required in many key issues - from the appointment of the board and its chairman to deciding the fee structure to the creation of new academic departments - what was once again forgotten that the viability of a university depends on its autonomy to sustain high standards and initiate innovation. The quality of public university system must be restored and without the basics of public education that starts from primary schools being revamped, excellence has little chance.

Millennium goalposts

The deadline for the Millennium Development Goals (MDG) is 31 December 2015. The concept will then be replaced by Sustainable Development Goals (SDG) for the next 15 years. The UN General Assembly is scheduled to meet this month to incorporate the SDG in its post-2015 agenda. Before the new framework is set in motion, it is time to evaluate what the MDG efforts have achieved.

The initiative was conceived with a plan, a budget, and a specific mapping of responsibilities. Although a major UN effort, no single individual or organization has been made responsible for achieving the MDGs. Instead, numerous public, private, philanthropic and nonprofit actors, working together and independently in developed and developing countries have been involved in the effort. Given such complexities, the achievements do seem impressive. Before the MDG was formulated, there was no common framework for promoting global development. The goals have brought the diffused international development community closer.

After the Cold War ended, many rich countries cut their foreign aid budgets to turn their focus on domestic priorities. The results were distressing. Africa suffered stagnation with rising poverty, child deaths and a drop in life expectancy. The economic crisis and the threat of growing inequality plagued Asia and Latin America. At the 2000 UN Millennium Summit, member-countries agreed on a set of measurable, time-barred targets in the Millennium Declaration.

In 2001, these targets were packaged in eight sets of MDG - to eradicate extreme poverty and hunger; achieve universal primary education; promote gender equality and empower women; reduce child mortality; improve maternal health; combat HIV/AIDS, malaria and other diseases; ensure environmental sustainability; and forge global partnerships among countries and actors to achieve development goals. Each objective was subdivided into specific targets. For example, the first goal involved cutting by half between 2001 and 2015, the proportion of people whose income is less than $ 1.25 a day. At the Monterrey (Mexico) conference in March 2002, leaders set a benchmark for sharing the burden; they urged the developed countries to make concrete efforts towards the target of 0.7 per cent of gross national income (GNI) as official development assistance to developing countries. The 22 official OECD donor countries were contributing an average of 0.22 per cent of GNI to aid. Thus working towards a 0.7 per cent target implied tripling the total global support. The MDG represents the first global framework anchored in an explicit partnership between developed and developing countries.

The United States was initially hesitant to accept the MDG agenda. It had endorsed the UN Millennium Declaration and the Monterrey agreement but refused to support the MDG largely because it was seen as UN-dictated aid quotas. The subsequent dissent from other countries and pressure from the US media convinced Washington to modify its position. The US administration eventually endorsed the MDG publicly at the 2005 UN World Summit. Since 2003, the USA launched an emergency plan for AIDS relief. This has dramatically improved access to AIDS treatment in those countries of Africa that were committed to good governance. This programme was in many ways in line with the MDG effort but did not explicitly link to the goals.

In 2010, five years before the deadline, the world had already met the overarching objective of cutting extreme poverty by half. The population of the developing world living on less than $ 1.25 a day had dropped from 43 per cent in 1990 to roughly 21 per cent in 2010. The framework is not solely responsible for poverty reduction. Progress was already under way in China and other Asian countries long before the MDG was adopted. In China alone, the proportion of poor people came down from 60 per cent in 1990 to 12 per cent in 2010. In South Asia, it fell from 51 per cent to 28 per cent. Nevertheless, the MDG has kick-started progress where it was lacking as in Africa, which has experienced unprecedented economic growth and poverty-reduction. The MDG campaign has prompted support for small subsistence and cash-crop farms, and this has spurred growth in many low-income countries of Africa. Bangladesh has achieved the goal of having reduced poverty by half well ahead of the deadline.

The major success has been achieved in the sphere of health. The goals have prompted a huge increase in private sector and philanthropic assistance. Thanks to this global effort, malaria deaths have dropped by 25 per cent since 2000. Many pharmaceutical companies have manufactured medicines that are now more widely available in poor countries and new initiatives are coming up. In Senegal, child mortality has dropped by half, in Cambodia by 60 per cent. Rwanda has recorded an eight per cent average annual reduction in child mortality since 2000 - one of the fastest declines in history. Overall, despite the rapid global population growth, there has been a worldwide decline in the number of children dying before the age of five - specifically from 9.5 million in 2000 to 5.5 million in 2013.

No issue has been more closely interconnected with MDG than the HIV/AIDS treatment campaign. In 2000, nearly 30 million people were infected, the vast majority in Africa where over one million people were dying every year from the disease. At that time, large-scale AIDS treatment in Africa was deemed impossible. Spurred by the launch of MDG, the World Health Organisation introduced the “3 by 5” initiative in 2003. It envisaged the treatment of three million AIDS patients in Africa by 2005. By the end of that year, only 1.5 million people were being treated. The target could not be reached, but due to the interwoven AIDS- MDG campaign, the notion of service delivery targets has sunk in globally, and this has helped in the expansion of AIDS treatment. In 2013, more than eight million people were being treated worldwide.

The MDG has proved that with concentration and efforts, even the most persistent global problems can be tackled. The post-2015 goals should remain focused on eliminating the multiple dimensions of extreme poverty; it is also imperative to address the emerging challenges that include pressure on the environment, affecting the livelihood of millions, the growing number of middle-income countries with daunting internal poverty challenges, and the rapidly spreading non-communicable diseases. The wish-list for sustainable development for the next 15 years should, like the MDG, be restricted to eight to ten objectives.

The fresh goals also need to be matched with resources. Without the Monterrey agreements of 2002 and the financial commitments at the Gleneagles summit in 2005, the MDG might well have faded from the international agenda. According to one estimate, the G-8 ended up falling more than $ 10 billion short on its Africa pledges for 2010 alone. The post-2015 negotiations should get a clear picture of budgetary support by the contributing countries. But with austerity and slow growth across much of the rich world, aid budgets to developing and poor countries appear to be under threat.

Multilateral organizations, such as the World Bank and UN agencies should get more involved and identify benchmarks for post-2015 success. The world’s poorest should not be betrayed. There are still 1 billion people today who live on no more than $ 1.25 a day. Over the next 15 years, the world has a chance to eliminate extreme poverty.

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